Supporting economic and social development with The Co-operative Bank
19 October 2015
The Co-operative Bank is proud of its roots in the co-operative movement and is committed to developing ethical products and services that promote economic and social development. Last week, The Co-operative Bank announced the launch of a £1 million fund to support the development and growth of the UK's dynamic co-operative and social enterprise sector, in partnership with Co-operatives UK. Here, we look at the Bank's role in the social economy.
The 'social economy' has been referred to as the 'third sector' of society, alongside the private sector and the public sector. The social economy includes co-operatives, voluntary and community organisations, charities, social enterprises and mutuals.1 The 2014 Values and Ethics report highlighted that just over half (51%) of The Co-operative Bank's total average Business and Commercial deposits came from social enterprises, co-operatives and environmental businesses.
Case Study: Wessex Archaeology
Wessex Archaeology is a market leader in the provision of archaeological services in the UK. A charitable company which puts sustainability and community engagement at the heart of its work, Wessex Archaeology is over 35 years old and has been a customer of the Bank for 13 years. The Co-operative Bank has worked closely with the charity since 2011, helping them to change their business model following the 2008 financial crisis.
In September 2015, The Co-operative Bank helped Wessex Archaeology secure one of its biggest contracts - a deal worth over £2 million to supply field work for a project in North Wales. The work involves the excavation of over 3,000 trenches, creating extra employment and improving the archaeological knowledge of the area.
Wessex Archaeology says: "We have enjoyed a longstanding relationship with The Co-operative Bank’s Charity and Social Enterprise team and the real test of this relationship came at the height of the recession in August 2011 when, for the first time, we required an overdraft facility. The Bank helped us to secure over 200 jobs and we were able to rebuild our balance sheet as our specific market sector improved.
"For a charity with limited access to credit and no shareholders, The Co-operative Bank's Charity and Social Enterprise team is a vital asset and we use them on a regular basis. As a public benefit charity with education at the core of everything we do, being able to talk with like-minded bankers is important."
Social Enterprise in the UK
The social enterprise movement is a growing part of the sector and is defined as businesses with primarily social objectives whose surpluses are principally reinvested for that purpose.2 It is a big, vibrant sector in the United Kingdom and employs nearly 1 million people - around 5% of the UK working population.3 The government estimates that there are around 70,000 social enterprises in the UK and 24% of Small and Medium Enterprises (SMEs) describe themselves as a 'social enterprise'.4
These enterprises tend to be young, growing and creating jobs - 35% of social enterprises are three years old or less, and 52% reported turnover growth in the last 12 months.
The social economy and The Co-operative Bank
With over half of The Co-operative Bank's total average Business and Commercial deposits coming from social enterprises, co-operatives and environmental businesses in 2014, the social enterprise sector is a key part of the Bank's commercial activity. "As a bank with a customer-led Ethical Policy, we would seem a natural fit for enterprises that have a social purpose at their core," commented Paul Martin, National Manager of Charity, Co-operative & Social Enterprise Banking at the Bank. "We also provide bank accounts tailored to each sector."
The Bank's Community Banking products include:
- Co-operative Directplus: An account specifically designed to meet the needs of Co-operatives and the only business account endorsed by Co-operatives UK.
- Social Enterprise Directplus: Available exclusively to social enterprises registered as Community Interest Companies.
- Community Directplus: Giving charities community groups and voluntary organisations an ethical way to bank and the opportunity to apply for community funding. For every £100 deposited, we add 20p to the Customer Donation Fund where Community Directplus customers can apply for funding. Since 2003, we have donated over £663,000 to 738 Community Directplus customers.
All community bank accounts provide free banking during the life of the account (provided you stay within the agreed limits) and combine sound business practice with ethical values.
For more information on our community banking products, go to the Community Banking Section of our website.
For more information on how we are bringing our Ethical Policy to life, visit our Ethical Policy in Action page.
4. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/205291/Social_Enterprises_Market_Trends_-_report_v1.pdf, p2.